World’s Top 7 Best Auto Sellers and the Strategy they follow

Currently, we find many competitors in the motor-vehicle manufacturing industry. The industry is however dominated by just a handful of companies. What separates this handful from the rest? Well, let’s take a look at the top seven auto companies by sales and the strategies they employ to increase sales.

Toyota

toyota-logoJapan’s Toyota Motors was the world’s best-selling brand in 2012 and 2013. In 2013, Toyota sold over 9.98 million new cars and trucks alone. The company’s bestselling model was the Toyota Corolla.

Toyota has continued to target specific market segments using innovative specific products ranging from two-seater cars to luxury SUV’s. Their current emphasis is on increasing their presence in North America, while maintaining existing markets.

General Motors

  • gm-logoAmerica’s General Motors sold 9.71 million units in 2013, with its popular Chevrolet brand selling just over five million units.
  • General Motors aims to target emerging markets as the new frontier for sales.

Volkswagen Group

  • volkswagen-groupSales of 9.7 million units in 2013 places the German corporation at third position.
  • It has been touted to surpass GM and Toyota as the world’s number one car-maker by 2018.
  • The firm has continued with its focus on the traditional European market while not forgetting emerging markets like Brazil, India and China (which is its largest market). Volkswagen sold over 3.2 million units to China in 2013.
  • The firm also hopes to introduce new products. It markets the products on the platform of quality.

Renault-Nissan Group

nissan-renaultThis alliance between Renault from France and Nissan from Japan sold more than 8.2 million units in 2013. The alliance between Nissan and Renault is strategic given their geographical locations and key markets they each control.

Renault hopes to ride on Nissan’s hold of markets in Asia, China and Africa while Nissan hopes to penetrate the European market by benefiting from Renault’s existing structures.

Hyundai-KIA

  • hyundai-kia-logo1The Korean auto company sold more than 7.5 million units in 2013. Their top selling model was the compact Electra/Avanti which sold 866,000 units, making it the fourth most sold unit worldwide last year.
  • The firm is trying to avoid a situation where the Hyundai and Kia brands, which are mostly mechanically similar, compete for the same markets.
  • The firm also aims to focus on the European market, where its sales have doubled over the last five years.

Ford Motor Company

  • Ford-Motor-Company-logoThe American car-maker sold over 6.3 million units in 2013, an 11% increase compared to the previous year.
  • Ford has continued with its focus on the North American market, which is its biggest market. The F-series pickup was Ford’s best-selling vehicle in Canada last year.
  • It has also announced a plan to expand into the Middle-East, Latin America and other emerging economies in Africa.
  • Ford also aims to continue making popular models, given that its compact focus was the world’s bestselling vehicle in 2013.

Fiat-Chrysler

  • fiat-chryslerThe merger between Italy’s Fiat and America’s Chrysler resulted in the sale of more than 4.3 million new units in 3013. Much of the firm’s growth came from Chrysler’s 14% increase in US sales.
  • The car-maker plans to improve existing brands while also introducing new ones. The company also aims to boost sales by 60% over five years, mainly by expanding into emerging markets, with particular focus on India and China.

Author Bio:

Stacy Eva lives in Birmingham, UK and is an avid reader and blogger. Since her early years she had a passion for writing. Her articles have been published in leading UK newspapers. Her areas of interest are Culture and Tradition, Food and Travel, Fashion and Lifestyle. As of now she is working as a freelance content manager for dsa practical test.

Book Review: On China, by Henry Kissinger

How do you describe China? How could one understand a land with historic roots that spawn for almost 4000 years? No easy task, that’s for sure.

Henry Kissinger, the statesman credited for opening the US ties to Communist China in 1971, tries to do just that in its book “On China”.

On China, Henry Kissinger
On China, Henry Kissinger

The book is a framework for anyone willing to dive in the complex culture that China has carried throughout the ages. It is a vast exposition on what makes China so enduring and so different from the type of empire we have come to know in the west.

The reason “On China” is reviewed here, a blog on the future of retail, goes beyond the obvious (manufacturing). By reading Kissinger’s masterpiece, we will get a glimpse into the future, through the lens of the past. We can see China is not a rising power. It is a returning power. It is a land that fostered the strongest economy in the world through 18 out of the previous 20 centuries.

China predated the Roman Empire. It survived it and lived on to be reached by the British Empire. It survived this one as well and now it survives another one. The fact that its economy keeps rising and rising, its retailers take the world by storm and the country has moved beyond its Mao Zedong legacy shows the quiet force this country packs.

The Wei Qi principle

Henry Kissinger proposes the Wei-Qi game as a start point to understanding China. As opposed to the oldest western strategy game, Chess, Wei Qi has some key differences.

First of all – there are a lot more pieces that have to be used in the game. The pieces are all equally valued. As opposed to chess, the Wei Qi pieces are all just as valuable. There are no knights, no bishops, no king and no queen. All pieces are equally important and equally effective.

The point is not to find the pivotal action to winning the game. The point is to avoid being surrounded. Throughout China’s troubled history, generals have discovered how costly defeats are, when the enemy surrounds the troops. The war strategy has shifted from direct engagement to battles that are won before they are even fought, through good preparation, as the mythical Sun Tzu general would have noted.

These simple yet powerful differences and others such, have shaped China’s destiny throughout the centuries. Western history barely mentions the Chinese Empire, yet the court viewed itself as ruler of all that is “Under the Heavens”. The Chinese Empire rarely fought outside its borders (viewing such act as a crime). It nevertheless encountered its fare share of troubles with barbarians outside its borders, constantly being attacked. Unlike its western counterparts, it used diplomacy, rather than force to subdue weaker civilizations. The court was well taught by centuries of rich history on how to negotiate alliances, resisting attacks, integrating barbarians or even using politics to break alliances between its closest enemies. Sometimes using the enemies farther away to control those closest to the empire.

The fall of the empire

Throughout the centuries diplomacy and politic skill has been enough to keep the “barbarians” at bay. Eventually, even the Celestial Empire had to run out of luck. In the beginning of the 18th century, Western colonial powers, as well as Russia, were knocking on the gates of the Empire, trying to develop a commerce relationship. Russia, being closer and in a position to threaten China, was the first country, Kissinger notes, to be allowed to have a de facto embassy. The embassy was in fact an orthodox mission but it was a lot more than the British Empire had.

The British, as well as other colonial powers, were barely allowed a presence within the empire. Commerce was carefully regulated and restricted. In time, as diplomacy failed to get results, the British decided to use force. As China previously refused to get  western military technology, it was quickly overwhelmed by better trained soldiers, using more advanced weaponry. The “Barbarians” forced their way towards the capitol, eventually being stopped by Russia’s diplomats who negotiated a temporarily redraw. But this help from the friendly Russians was costly. China agreed to a humiliating act that would offer vast territories to Russia, in exchange for its help.

This humiliating treaties, rising internal instability, and the enemies at the gates eventually lead the empire to crumble. In 1912, the last Emperor abdicated, and China became a republic.

It wasn’t for the better, as China was virtually ungoverned. Henry Kissinger lists intervention by the United States to help the forming republic, supporting the existing nationalist government. But it was not this government that eventually won the power. It was a new leader, a communist leader: Mao Zedong.

The Communist China

Kissinger lists Mao’s rise with a reverence that may seem unnatural at times. After all – Mao is seen less like an enlightened leader in the western world, and more like a power hungry criminal that lead its country, as well as the party close to imminent self destruction. Whether it is diplomatic courtesy (you have to expect reverence from a high level US statesman) or genuine interest, if not admiration – Kissinger is clearly inclined to describe Mao as a Chinese savior. Whether it is the fact that he reunited China, or that China survived the Soviet Union’s threat, Henry Kissinger sees Mao as an important geopolitical player.

Mao defied and somehow survived both the US and the Soviet Union. Unlike the weakened European countries, Mao repeatedly declared his country was not afraid of the Nuclear Threat. No one will know if he was just bluffing to resist on the world stage, or he was actually not caring if 300 million Chinese would die in a Nuclear war. The “Great Leap Forward” and the “Cultural Revolution” would later point into the second direction.

The farthest enemy

Although Mao listed Confucianism and “the old ways” as obsolete and not to be used, he did resort to one of these tactics when the Soviet Union deployed 1 million soldiers at the Chinese-Soviet border. The soldiers were not much of a problem, but the nukes were. China and USSR were no longer comrades, and the Soviet Union was likely planning a preemptive nuclear attack. Mao decided to apply the old strategy of using the enemies from afar against those closer.

In 1971 Henry Kissinger lists its meeting with both Mao Zedong and Zhou Enlai. At the time, Zhou Enlai was the prime minister for over 22 years and he left a deep impression on the US statesman: “In 60 years of public life, I have never met a person more fascinating than Zhou Enlai“. This meeting extended in the next year with a visit from Richard Nixon and it was the the start in a long relationship between the two states.  It was also the visit that probably stopped a nuclear attack on China.

Mr. Enlai was eventually replaced and Mao left its position, leading the way for a new leadership. It was this new leader, Deng Xiaoping, that turned China from a starving, barely educated country, bathing in Mao’s shadow, to a growing economic power.

His work was later continued by Jiang Zemin, that encouraged education, technology developments and eventually helped China join the WTO in 2001.

Since 2001, just 13 years ago, China became a leading manufacturer, the sourcing choice for retailers worldwide, to a dominant power that now exports not only products, but rather leading businesses.

Henry Kissinger ends the book by reminding the reader of the Crowe Memorandum,  an analysis of pre-WWI Germany and the causes that lead to war. Though he envisions a future where the Pacific Powers (US and China) can collaborate in peace, he does pose the question of whether such a future is possible. The last paragraph cites Zhou Enlai, at the first meeting in 1971, when the Chinese PM mentioned their meeting will “shake the world”. The big question, for this new century, mr Kissinger asks, is could China and the US build the world, rather than shake it?

 

China Passes US in Terms of Online Retail. Europe Lags Behind with 12% Growth Rate

China’s Ministry of Commerce released data showing huge growth in terms of Online Retail. Chinese consumers spent $296.57 billion online in 2013, 13% more than their American counterparts ($262.51 billion in 2013). That means China is now the biggest market for online retail.

China showed a 41.2% growth YoY and is now the largest online retail market

Chinese online retail market showed a 41.2% growth rate from 2012, a result of a) an increase in online spending and b) an increase in the total number of internet users. The number of internet users in China grew 8.5% to a total of 618 million users at the end of 2013. As a result, China showed an increase of 52.4 million in online consumers.

Chinese B2C ecommerce expected to grow even faster in 2014.
Chinese B2C ecommerce expected to grow even faster in 2014. Source.

Although China surpassed the US in total online spending, one must not ignore the fact that the US still spends almost twice as much online than China. The total number of internet users in US, according to Internet World Stats is 277 million, 54% less than internet users in China.

As such, American users spend 945$ per year online, whereas Chinese users spend 478$ per year. Moreover, online retail in China is more or less a monopoly ran by the Ali Baba group, a company preparing for an american IPO. With  $248 billion in transactions handled in 2013 through its many subsidiaries, Ali Baba accounts for 84% of all Chinese online retail. That is NOT a balanced market.

Although the numbers amount in favor of Chinese online retail (large growth rates, increased number of consumers and a lot of room to grow) Ali Baba’s dominance does not paint a pretty picture. Whereas US online retail is a competitive and balanced market, the Chinese behemoth has clay legs. Sure – it had a astonishing growth and there certainly is a market there, but can the Chinese leaders take on mature, innovative markets? My bet is on NO. The centralized, planned uber-organization can work pretty well in China but in the competitive world of global markets it might run into trouble.

Europe lags behind and is expected to reach $318 billion in 2018

Europe shows a healthy, double-digit growth rate in terms of online retail, yet still lags behind the US and China. Forester shows that Europe will grow with a CAGR of 12% until 2018, when the market is expected to reach €233.9 billion ($318 billion).

This is neither good nor bad. Europe is still making peace with it’s new-found unity. The European Union still has to battle inequality between countries, has had a rough time battling recession and has just recently considered online retail as a viable alternative to classic retail.

Northern Europe is more mature in terms of online retail development, thus shows smaller growth. Southern and Eastern Europe has increasingly adopted online retail as means to reach its uncovered consumers and shows larger growth rates.

Make no mistake, however. Europe is a large market. It has 518 million internet users and there is still room to grow. There are more money to spend and surely Europeans will get moving soon. Just as soon as they get over this recession thingie.

 

eCommerce in China will reach $655 billion by 2020

In a recent outlook on China’s eCommerce Evolution, Brent Cohen outlines the astonishing evolution we might be missing.

In 2012 China had a 66.5% growth rate and registered RMB 1,2 trillion ($197 billion) in eCommerce transactions. Cohen says an expected RMB 4 trillion ($655 billion) increase by 2020 is a “conservative” estimate.

China's compound Growth rate, 2003-2011 - 120% . China grew 7 times faster than the US.
China’s compound Growth rate, 2003-2011 – 120% . China grew 7 times faster than the US.

That shouldn’t be too surprising for anyone not completely blind to outside-US eCommerce. Although US still leads the way both in terms of market size and per-capita spending, China is catching up fast. It’s main assets:

  • it’s the biggest market in terms of ecommerce shoppers in the world (242 million people)
  • it has a 6.3% eCommerce share of total retail (US only has 5%)
  • it fills a gap between the large territory the country has and the relatively small coverage classical retail stores provide. Online retail in China provides a coverage of 51% whilst the brick-and-mortar retail – only 13%

Have a look at this great resource:

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